As Evictions Loom, Cities Revisit a Housing Solution From the 70s

Proposals giving tenants the right to purchase their building are being revived as Covid-19 puts renters at risk.
By Clyde Haberman

Even before the pandemic rang down the curtain on much of the U.S. economy, times could be tough for the roughly 110 million Americans living in rental housing. For many of them, paying the landlord was a tattered hope and staving off the sheriff’s deputies an endless worry. Nearly 4 million eviction petitions were filed each year. On any given night as many as 200,000 people were without a home.

In the pandemic, losing shelter is an ever-present threat on a far bigger scale, by some estimates potentially affecting upward of 30 million cash-strapped tenants. A calamity of that magnitude has been averted, for now, under a moratorium on evictions imposed through 2020 by the Centers for Disease Control and Prevention. But equitable and compassionate solutions to America’s chronic housing problems will clearly remain an elusive goal long after the coronavirus is conquered.

One method with promise is explored in this video from Retro Report, whose mission is to examine major events of the past for their continuing impact and enduring lessons. The underlying premise is a familiar one: giving people a genuine stake in their apartments and houses by turning renters into owners. The video focuses on two situations separated by half a century: in San Francisco, where the idea was not able to get off the ground, and in Minneapolis, where it has taken flight, albeit with an uncertain future.

The San Francisco story dates to the late 1960s on Kearny Street, in a neighborhood known as Manilatown because of its many immigrants from the Philippines. There, the three-story International Hotel was home to 150 people, principally Filipino laborers who rented rooms for about $50 a month, about $380 in today’s dollars. In 1968 the hotel’s owners handed tenants eviction notices. Developers had begun to reconfigure the city in the name of urban renewal. The I-Hotel, as many called it, was to be razed to make way for a parking lot.

The tenants resisted. They were supported by neighbors, church leaders and community activists like Emil A. De Guzman Jr., then a college student who had lived in the hotel for a while. “The whole struggle came down to just one thing,” he told Retro Report recently. “It became people’s rights over property rights.”

Property rights prevailed. After nine years of turmoil, in 1977 the owners had the courts’ blessing to evict the hotel residents. Protesters were roughed up and dragged out, Mr. De Guzman included. “I can’t tell you the anguish, the sense of loss, you know, to be left homeless, thrown out on the street,” he said. “They lost the sense of community that had protected them.”

What ultimately rose on the site were new apartments for the elderly, a church school and a community center. But the outcome could have been different. A year before the evictions, San Francisco’s mayor, George R. Moscone, suggested a new approach, proposing that the owners sell the hotel to the residents, who were to get the necessary money through a government loan.

(In November 1978, Mr. Moscone and a San Francisco supervisor, Harvey Milk, were shot and killed by a disgruntled former city official.)

The mayor’s idea never really got rolling. The tenants and their supporters turned it down, arguing that they would need $1.3 million in financing to make the project work. “If we had that kind of money,” they wrote in a petition, “we wouldn’t be living like this to begin with.”

But the concept behind the Moscone plan had resilience, and in 1980 it became embodied in legislation passed in the District of Columbia: the Tenant Opportunity to Purchase Act, or Topa. It gave tenants or allied developers the right to be first in line to buy any building about to be sold by its landlord. Once tenants made clear they were interested, the landlord had to give them time to make an offer and raise the funds.

Studies show that several thousand units of affordable housing in D.C. were preserved this way, for less than it would have cost to build new housing. Versions of Topa have more recently been proposed in other parts of the country, notably in New York, California and Massachusetts.

One place that has made the idea a reality is a low-rise complex in Minneapolis that houses 40 families. As recounted by Retro Report, the landlord sought to push out the tenants so that he could sell the buildings. But while lawyers duked it out, the residents took action, forming a collective to buy the complex, aided by city officials and an activist group called United Renters for Justice. The sale, for $7.1 million, was completed in May. A nonprofit group put up the money as a loan, and will manage the property for three years while the residents pay back the debt.

Tenant leaders like Ms. Jackson expressed confidence in their ability to keep up the payments. Still, success is not assured, especially when millions across the country are out of work. If people who lose their jobs can’t cover the rent, why would they be in a better position to repay a loan?

Some landlords have their own concerns. They are hardly real-estate giants. On the contrary, they are so-called “mom and pop” owners with maybe a building or two. But they account for nearly half of all rental units in the United States: 22.7 million out of 48.5 million. If little or no rent money comes in, they risk being unable to pay the mortgage, buy fuel and perform essential maintenance.

The fact that 40 years have passed since Topa originated in Washington without its being widely replicated across the country suggests that moving from renter to shareholder is no simple matter. Among other things, it can be difficult in larger buildings for tenants to agree on a collective course of action.

What will happen once the C.D.C.’s eviction moratorium ends is anyone’s guess. Even before the pandemic, millions of Americans were crushed by their rent burden. An Aspen Institute study shows that in 2018 nearly half of renter households paid more than 30 percent of their income to the landlord; some paid more than 50 percent.

That is one reason Chloe Jackson embraces her new status, inherent risks notwithstanding. Yes, the loan must be repaid, she said. “But we are thinking as owners, our mind-set is as owners, and we’re ready to do it.”

CLYDE HABERMAN is a regular contributor to Retro Report. He has been a columnist and editorial writer for The New York Times, where he spent nearly 13 years as a foreign correspondent based in Tokyo, Rome and Jerusalem. The video with this article was created in partnership with the Economic Hardship Reporting Project. This article originally appeared in The New York Times. To watch more, subscribe to the Retro Report newsletter and follow Retro Report on YouTube and Twitter.